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On the Use of 'Adders' by Public Utility Commissions

Author

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  • John Tschirhart

Abstract

State public utility commissions are developing programs to reduce emissions from electric generation facilities. Programs call for minimizing the total cost of meeting future demands for power, where pollution damages are part of the total cost. In the process of choosing new generation sources, dirtier technologies are handicapped relative to cleaner technologies through the use of "adders" which are meant to measure damages. However, the damage costs are left at the planning stage; they are not included in electricity rates. This practice coupled with standard rate setting procedures may lead to inferior outcomes.

Suggested Citation

  • John Tschirhart, 1994. "On the Use of 'Adders' by Public Utility Commissions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 121-128.
    • Handle: RePEc:aen:journl:1994v15-01-a07
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    Cited by:

    1. Burtraw, Dallas & Krupnick, Alan J., 1996. "The second-best use of social cost estimates," Resource and Energy Economics, Elsevier, vol. 18(4), pages 467-489, December.
    2. Dallas Burtraw & Karen Palmer & Alan J. Krupnick, 1997. ""Second-Best" Adjustments to Externality Estimates in Electricity Planning with Competition," Land Economics, University of Wisconsin Press, vol. 73(2), pages 224-239.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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